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  • Question

    Is the contractor (on behalf of the government) allowed to accept upgraded equipment at no cost? What regulation governs this activitiy?


    Answer

    It depends on whether the computers are still carried as Contractor-acquired property (CAP) by the contractor, are now Government-furnished property (GFP) listed on the contract or were delivered and are now in the possession of NASA and not under the stewardship of the contractor (listed as GFP on the contract). 
     
    But you’ve provided way too little information as a foundation for an appropriate answer.
     
    For instance…
    ·  What was the nature of the work the contractor was performing as described in the performance work statement (PWS) or statement of work (SOW) contained in Part I (The Schedule), Section C of the contract document? 
    ·  Was the contractor performing under a Fixed-price contract?  If so, were the computer systems delivered under a cost-reimbursement contract line item (CLIN) and accepted by the Government on an appropriate inspection and receiving report? 
    ·  Was the contractor performing under a cost-reimbursement contract?  If so, were the computers delivered under a CLIN and accepted by the Government on an appropriate inspection and receiving report?
    ·  Are these computers carried as Contractor-acquired property (CAP) or as Government-furnished property (GFP) and remain under the stewardship of the contractor?
    ·  Were these computers delivered to the NASA and entered onto their financial control records but were not made GFP to the contract for stewardship purposes (retained by NASA)?
     
    NASA has title to these computers if the contract was either cost-reimbursement or delivered as a Cost-Reimbursable contract line items under Fixed-Price contract as FAR clause 52.245-1(e)(3)(i) would apply as noted below:
     
    (3)Title under Cost-Reimbursement or Time-and-Material Contracts or Cost-Reimbursable contract line items under Fixed-Price contracts.
    (i) Title to all property purchased by the Contractor for which the Contractor is entitled to be reimbursed as a direct item of cost under this contract shall pass to and vest in the Government upon the vendor's delivery of such property.
     
    However, without having additional pertinent information your question remains unanswerable.
     
    References:
    None

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